10/27/2021
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
July 21, 2021 Session
RICHARD J. HARTIGAN ET AL. v. ARNOLD BRUSH, INDIVIDUALLY AND IN
HIS CAPACITY AS ADMINISTRATOR OF THE ESTATE OF PAMELA SUE BRUSH
Appeal from the Chancery Court for Roane County
No. 2015-124 Frank V. Williams, III, Chancellor
No. E2020-01442-COA-R3-CV1
This is the second appeal in this action for breach of a contract to purchase improved real
property. Prior to the first appeal, the trial court, having found following a bench trial
that the defendant buyers, Arnold Brush and Pamela Sue Brush, had breached the parties’
purchase and sale agreement, initially entered damage awards in favor of the plaintiffs,
who included the sellers, Richard J. Hartigan and Leila R. Hartigan; the Hartigans’
realtor, James M. Henry d/b/a Coldwell Banker Jim Henry & Associates (“Coldwell
Banker”); and a realty company, Lakeway Realty Group, Inc. (“Lakeway Realty”), with
whom the Brushes had entered into a buyer representation agreement. Mr. Brush, by
then acting individually and as the Administrator of the Estate of Pamela Sue Brush,
appealed to this Court, raising issues concerning the trial court’s calculations of damages
and pre-judgment interest. This Court affirmed the judgment in favor of Lakeway Realty
but vacated the award of damages and prejudgment interest to the Hartigans and the
calculation of prejudgment interest awarded to Coldwell Banker. This Court directed that
upon remand, the trial court was to enter additional findings of fact regarding the fair
market value of the property, with further proceedings as necessary, and recalculate the
amount of prejudgment interest awarded to Coldwell Banker. Following a hearing on
remand, the trial court entered a final order, confirming its previous damages award to the
Hartigans and ratifying an announced agreement awarding a revised total judgment to
Coldwell Banker in the amount of $18,240.16. As pertinent on appeal, the trial court
awarded a judgment to the Hartigans in the total amount of $225,688.98, representing the
difference between the purchase price set forth in the purchase agreement and the price
ultimately paid for the real property by third parties, minus earnest money paid, plus
prejudgment interest and costs for upkeep and a share of attorney’s fees and private
investigator fees. The trial court also awarded post-judgment interest to the Hartigans
pursuant to Tennessee Code Annotated § 47-14-122. Mr. Brush has appealed the general
1
Upon the appellant’s motion, this Court entered an order on April 12, 2021, consolidating the record
from the prior appeal in this matter, No. E2019-00262-COA-R3-CV, with the record in the instant appeal.
damages and interest awarded to the Hartigans. Discerning no reversible error, we
affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed; Case Remanded
THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which JOHN W.
MCCLARTY and KRISTI M. DAVIS, JJ., joined.
Jerrold L. Becker, Knoxville, Tennessee, for the appellant, Arnold Brush, individually
and in his capacity as Administrator of the Estate of Pamela Sue Brush.
Sharon Reynolds Clark, Kingston, Tennessee, for the appellees, Richard J. Hartigan;
Leila R. Hartigan; James M. Henry d/b/a Coldwell Banker Jim Henry & Associates; and
Lakeway Realty Group, Inc.
OPINION
I. Factual and Procedural Background
The improved real property at issue is a five-thousand square foot, custom-built
home located on a 1.3-acre lot within a gated community in Kingston, Tennessee (“the
Property”). Upon the first appeal of the trial court’s judgment following the bench trial,
this Court set forth the following pertinent factual and procedural history:
In 2007, Plaintiffs Richard J. Hartigan and Leila Hartigan (collectively,
“Sellers”) built a five-thousand square foot custom home on 1.3 acres of
real property in the Highland Reserve subdivision in Kingston, Tennessee,
at a cost of approximately $951,000. The property sits on a ridge
approximately 300 feet above the Tennessee River and has water views
from all sides. The Highland Reserve subdivision is a gated community
and offers amenities including a swimming pool, a pavilion, and a pond
which are available for use by the homeowners.
In August 2014, the Hartigans engaged a realtor for a term of six
months to sell the home. The realtor did not show the home during that
time. In April 2015, the Hartigans engaged another realtor, Kathy May
Martin with James M. Henry d/b/a Coldwell Banker Jim Henry &
Associates (“Coldwell Banker”). The Hartigans’ listing agreement with
Ms. Martin provided for a listing price of $750,000 and a realtor’s
commission of six percent.
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In Spring 2015, Defendants Arnold Brush and wife, Pamela Brush
decided to relocate from Arizona to Tennessee. In May 2015, the Brushes
entered into an exclusive buyer representation agreement with Carol Ann
Buchanan of Lakeway Realty Group, Inc. (“Lakeway Realty”), to act on
their behalf. The agreement, which expired on November 16, 2015,
provided for Lakeway Realty to be paid a three-percent commission on the
sales price of property purchased by the Brushes.
In June 2015, the Brushes made an offer to purchase Sellers’
property for $675,000. The Brushes requested a closing date of July 14,
2015, “or any other date of Seller’s choice before Labor Day, September 7,
2015.” Sellers counter-offered at a sales price of $712,000 and a closing
date of July 23, 2015, “or any day prior to Labor Day.” The Brushes
accepted Sellers’ counter-offer on June 16, 2015, and the Brushes deposited
earnest money in the amount of $6,000 with Lakeway Realty.
Several appraisals of the property were performed as the Brushes
sought financing for the purchase. An appraisal conducted for Quicken
Loans valued the property at $640,000. On the advice of Ms. Buchanan,
the Brushes decided to seek financing from a local lender, Peoples Home
Equity, Inc. (“Peoples Home Equity”). An appraisal performed by the
Thomas Fuller Appraisal Company for Peoples Home Equity in July 2015
valued the property at $730,000. The parties set a closing date of August
11, 2015, and a final walk-through was conducted on August 9. Peoples
Home Equity determined an additional appraisal was necessary, however,
and the parties were unable to close on August 11. An appraisal performed
by Appraisal Management Specialists for Peoples Home Equity on August
12, 2015, valued the property at $712,000.
Peoples Home Equity neither approved nor denied the Brushes’
financing application, and the Brushes chose to forfeit their earnest money
and withdraw from the purchase agreement on August 27, 2015. On
September 27, 2015, the Brushes entered into a contract to purchase a home
in Gallatin, Tennessee, at a purchase price of $575,000. They closed on the
Gallatin property on November 25, 2015.
Sellers relocated to Michigan just prior to the anticipated August 11,
2015 closing date, leaving the property vacant but continuing to maintain it
in good condition. Coldwell Banker continued to market the property. The
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listing price was reduced to $590,000 and reduced again at some point prior
to the property eventually selling for $550,000 in October 2016.
On November 12, 2015, Sellers, Coldwell Banker, and Lakeway
Realty (collectively, “Plaintiffs”) filed an action for breach of contract
against the Brushes in the Chancery Court for Roane County. In their
complaint, the Hartigans sought specific performance of the June 2015
purchase agreement, special damages arising from the breach, prejudgment
interest, attorney’s fees, and costs. They prayed in the alternative for an
award of damages for breach of contract, special damages, prejudgment
interest, attorney’s fees, and costs. Coldwell Banker sought damages in the
amount of $25,632 as a third-party beneficiary of the purchase agreement,
in addition to prejudgment interest, attorney’s fees, and costs. Lakeway
Realty sought damages in the amount of $21,360, prejudgment interest,
attorney’s fees, and costs. In January 2018, Lakeway Realty filed an
amended complaint seeking additional damages under the May 2015
exclusive buyer representation agreement. In its amended complaint,
Lakeway Realty asserted that it was entitled to a commission of three
percent of the purchase price of the property purchased by the Brushes in
Gallatin. It sought a judgment in the amount of $17,250 plus prejudgment
interest, attorney’s fees, and costs.
The Brushes answered the complaint in March 2016, generally
denying Plaintiffs’ allegations of breach and that Plaintiffs were entitled to
a judgment. The Brushes further asserted that they had been unable to
secure financing, and that the financing contingency contained in the June
2015 purchase agreement accordingly had not been fulfilled. Pamela Brush
died in October 2016, and Defendant Arnold Brush was appointed
Administrator of her estate. By agreed order entered March 24, 2017, the
matter subsequently proceeded against Arnold Brush (“Mr. Brush”) in his
individual capacity and as Administrator of the Estate of Pamela Sue Brush.
The trial court heard the matter on October 22, October 26, and
December 6, 2018. The trial court determined that Mr. Brush was unable to
demonstrate that the Brushes were denied lending, specifically finding that
“[t]he fact that the Buyers were unable to secure lending at the rate of
interest originally applied for was insufficient to show lending was
unavailable.” It further found that the Brushes’ failure to close on the
property constituted a breach of the purchase agreement.
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The trial court entered a judgment in favor of Sellers in the amount
of $162,000, the difference between the purchase price of $712,000 set-out
in the purchase agreement and the 2016 sales price of $550,000. It found
that Mr. Brush was entitled to a credit in the amount of $6,000 for the
earnest money forfeited under the purchase agreement. The trial court
further determined that Sellers were entitled to additional damages in the
amount of $28,185.15 for costs incurred from September 7, 2015, until the
property was sold in 2016.
The trial court found that Coldwell Banker was entitled to a
judgment in the amount [of] $25,632 for amounts due under the purchase
agreement, and credited the Brushes with $19,800 against the award for the
commission Coldwell Banker received following the sale of the property in
2016. The trial court awarded Lakeway Realty damages in the amount of
$21,360 for damages under the purchase agreement and exclusive buyer
representation agreement.
The trial court awarded Plaintiffs attorney’s fees in the amount of
$29,007.30. It found that Plaintiffs were entitled to prejudgment interest in
the total amount of $39,203.79. The trial court awarded the Hartigans a
judgment in the total amount of $225,688.98. It awarded Coldwell Banker
a judgment in the total amount of $20,447.86. Lakeway Realty was
awarded a judgment in the total amount of $35,251.40. The trial court
entered final judgment in the matter on January 15, 2019, and Mr. Brush
filed a timely notice of appeal to this Court.
Hartigan v. Brush, No. E2019-00262-COA-R3-CV, 2020 WL 563522, at *1-3 (Tenn. Ct.
App. Feb. 4, 2020) (footnote omitted) (“Hartigan I”).
As he does in the instant appeal, Mr. Brush contended in Hartigan I that “the trial
court erred by calculating the contract damages in this case as the difference between the
June 2015 contractual purchase price of $712,000 and the October 2016 sales price of
$550,000,” arguing that the trial court should have found the contractual purchase price
to be the fair market value. See Hartigan I, 2020 WL 563522, at *3 (“The measure of
damages to be awarded in an action for breach of contract for the purchase of real
property is the difference between the contractual purchase price and the value of the
property ‘at the time set for closing.’” (quoting Sec. Land Co. v. Touliatos, 716 S.W.2d
918, 921 (Tenn. 1986)). Mr. Brush thereby asserted in the first appeal, as he does now,
that because “the August 2015 appraised value of $712,000 accurately reflects the market
value of the property at the time of breach in August 2015,” the Hartigans “are not
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entitled to an award of damages or prejudgment interest on those damages.” See
Hartigan I, 2020 WL 563522, at *3 (footnote omitted).
In vacating the trial court’s award of damages and prejudgment interest to the
Hartigans, this Court determined in relevant part:
[A]lthough the trial court awarded damages in an amount equal to the
difference between the June 2015 contract price and the October 2016
selling price, the trial court’s order includes no findings with respect to the
fair market value of the property at the time of breach in August 2015.
Although the trial court noted the impact of the 2008 financial downturn on
the housing market in general, the trial court made no findings with respect
to the circumstances surrounding the 2016 sale of the property; with respect
to why or when the sales price was reduced; with respect to the appraised
value of the property by three appraisers in June, July, and August 2015; or
as to whether, in light of the circumstances of this case, the substantially
reduced sales price accurately reflected the real market value of the
property at the time the Brushes breached the contract in August 2015.
Id. at *4. Concerning the damages award to the Hartigans, this Court directed the trial
court as follows on remand:
We . . . remand this matter to the trial court for further findings on this issue
and, if necessary, a recalculation of damages. The trial court may conduct
further proceedings on this issue, if necessary. Because the amount of
prejudgment interest is dependent on the damage award, the issue of the
trial court’s award of prejudgment interest to the Hartigans is pretermitted,
and therefore vacated and remanded.
Id. at *5.
On remand, the trial court conducted a hearing on June 16, 2020, during which
counsel presented arguments as to the basis of the damages award to the Hartigans and
announced an agreement concerning the calculation of prejudgment interest to be
awarded to Coldwell Banker.2 At the beginning of the hearing, Mr. Brush’s counsel
submitted proposed findings of fact and conclusions of law with citations to the record.
The Hartigans’ counsel responded to portions of the specific findings and conclusions
submitted by Mr. Brush, citing to the transcript and reading from short passages of the
transcript. Mr. Brush’s counsel responded, also citing to the transcript and reading from
2
The award of prejudgment interest to Coldwell Banker is not at issue in the instant appeal.
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it to some degree. Regarding its calculation of the damages awarded to the Hartigans, the
trial court announced its ruling at the close of the hearing, stating in pertinent part:
Let me begin by saying that first of all we’re, when we talk about these
appraisals, we’re talking about expert opinions. And the Court is not bound
to accept the opinion of any expert, but it should consider expert opinions
in light of all of the other evidence in the case, and it can accept or reject
any expert opinion that the Court does not feel to be reliable under the
totality of the facts. And so I am not bound to accept any of these
appraisals as the fair cash market value of this home but should consider
them only insofar as they might add weight or value to other evidence in
the trial of the case.
Here we have an arm’s length transaction, a second sale – and let me
say, this is – I’m sort of going off on a tangent here, but at the first trial of
this case I was personally concerned about the amount of damages that I
had awarded against Mr. Brush. And so on my own initiative I scheduled a
rehearing, reargument, on the issue of damages just because I wanted to
make sure that the figures that I was working with were the figures that I
should be using and that I should not be doing anything to Mr. Brush, or for
the plaintiffs, for that matter. It’s not for anybody. It’s trying to determine
what’s right.
And I wasn’t comfortable because – just because of the sheer
amount of money involved. And so I had another hearing, another
argument, and at the conclusion of that I thought that the figure that I had
awarded at the first hearing was correct and that the subsequent sale for, I
believe it’s $550,000 or in that neighborhood, is in this case the best
evidence of the fair cash market value of this house when it was later sold,
a year – approximately one year later to other buyers after Mr. and Mrs.
Brush backed out of the sale, the initial sale.
And in that regard I would find that the subsequent sale some year or
so later was on the same or similar terms and conditions as those that
existed at the first sale except to the extent that the actions of Mr. Brush
changed those circumstances by his breach – his initial breach of the
contract.
I find that the second sale was an arm’s length transaction between
willing buyers and willing sellers, neither under the compulsion to buy or
sell, and that the plaintiffs had nothing to do with any changes in
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circumstances that may have occurred but that the circumstances, to the
extent that they did change, were the result of the breach by the defendants
Brush.
I could find – first of all, the testimony was that the offer made by
Mr. and Mrs. Brush, the $712,000 offer that was accepted, was the first
offer that the sellers had, and this was on a house that cost between
$900,000 and $1 million to build. And so – and my recollection of the
photographs, this is an incredible house. I think I made some comments or
findings about that at the conclusion of the trial. This is just an incredible
house. It is a spectacular house. It looks like a million dollar house. And I
don’t have the photographs here in front of me, but my recollection at this
point is that this house is up on a high point, and if I’m not mistaken it
offers what could be called a bird’s-eye view of Roane County, or a large
part of it. And I’m just trying to recall what I heard and saw at the first trial
of the case. As I say, I haven’t opened up the folders over here and gone
back through the exhibits, but it just is not only an incredible house, but the
location is spectacular.
And this house was built at a – you could say that the timing was
terrible, because not only was it a house in terms of its size and cost – I
believe that one witness testified that there was no broad market for homes
of that size and quality in this area. And that would be my finding: that the
house was going to sell for less than what it cost to build it from the day it
was built. I can’t see from the day it was built how, given the conditions
here in this area, that the original builders could have possibly hoped to
recover what they had put into the house.
And so they ended up being able to get a contract with Mr. and Mrs.
Brush, and the first offer they had for $712,000, but there were many, many
things going on back at that period of time. There was the real estate
bubble, as I recall, that affected it in 2008 and 2009, and then in the
following years it took a long time for the real estate market to recover, and
so that was working against the house and the sellers of the house. And
while there may have been some recovery for the sale of houses in general,
there was testimony that there was no recovery for houses in excess of
$500,000. In other words, houses this big, this valuable, this nice, given
their construction and location. And so these things clearly affected the fair
cash market value of the house. And the fact that the defendants made an
offer, had a contract, breached the contract, apparently that is a negative
impact as well.
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The size and location of the house made it difficult even to find
comparables in value for the purpose of making an appraisal. It would have
– it just would have seemed extremely difficult to find comparable sales of
comparable homes anywhere nearby, and I think that was in the testimony
as well.
A lot has been said about the staging of the house for the second
sale, that at the second sale the house was unfurnished – essentially
unfurnished. There might have been some few items in there but not
furnished to the extent that it was at the first sale. But on the other hand, all
of that furniture, the furnishings, appliances – whatever had been in the
house that the sellers removed – were removed because they had a contract
with the defendant Brush and they had to vacate the premises. They had to
get their things out. And now the defendants are arguing that for the
second sale they should have refurnished it, perhaps not only by bringing
back their own furniture from wherever they had it shipped to, which I
think was out of state somewhere – I believe they went to another state
even – to either bring it back or to perhaps go out and rent enough furniture.
This house, if I’m not mistaken, was something like 5,000 square
feet. So they would have had to rent furniture, 5,000 square feet of
furniture, which that furniture was there when they had the contract, the
initial contract at $712,000, but it wasn’t there at the time of the second
contract for $550,000 because of their breach. It was their breach that
caused the removal of the furniture. And if there was any impact on the
second sale it was because of that breach, and so the Brushes should not
now be heard to complain because the house brought less at the second sale
because it was unfurnished, when they were the ones that caused it to be
unfurnished, and that then breached the contract after the furniture and
furnishings had been removed from the house.
Otherwise, the circumstances are more than similar to the – at the
second sale were more than similar to the first sale. It wasn’t sold at
auction. It was sold at a private sale. And as I heard the testimony and
recall the testimony, it was the first offer that they received after the
defendants breached their contract. And that offer was for $550,000 which,
given all of the problems in the economy, that bursting housing bubble, the
2008 TVA [Tennessee Valley Authority] ash spill which was mentioned as
one factor, and the fact that the sellers removed their things in anticipation
of closing, which didn’t take place, everything else was similar – the terms
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and conditions – everything was similar, and to the extent that it wasn’t
similar it was because of the actions of the defendants that changed the
conditions.
That second sale, from everything that I have heard, for $550,000
was an arm’s length transaction on substantially similar terms between
willing buyers and willing sellers, neither under the compulsion to buy or
sell. And, as a matter of fact, I think [the Hartigans’ counsel] read some
testimony that the contract that was signed at the second sale was identical
– was a form contract, was identical to the contract that was signed and
used as the contract between the sellers and the defendants Brush for seven
hundred and – the only thing that was different was the amount of money.
It was marketed in a substantially similar manner.
So I have no reason – I would say this in deference to the arguments
being made on behalf of the defendants: that it could be that the house
could have been sold for more than $550,000. It may be – may have been
possible to sell it for more than $550,000, but the question is always, Well,
when would that have been? How long would the sellers have had to
continue to market the property? to advertise it? to show it? when all of
these other circumstances were as they were back then, especially for a
house that size. As I said, you know, just finding somebody to buy a house
that size and that quality in this area would have been tough from the get-
go. So to say that it could have been sold for more money you would have
to agree that, well, it could have been. We’ll never know. We’ll never
know because the breach of the first contract created subsequent events that
led to a subsequent sale at $550,000, and there’s no reason that I have heard
to find that that was in any way contrived by the sellers or by the brokers or
manipulated or was due to any act or omission on the part of the owners or
their agents that were calculated to bring a substantially lower price than
the $712,000 that the Brushes had agreed to buy it for originally.
So I think that the fair cash market value is exactly what I found. I
obviously wasn’t thinking of having to make a statement to that effect, but
that’s the way I saw it then and it’s the way see it now. I know it’s hard,
and that’s why I had the second hearing is because I don’t like doing things
that I know are hard. And so I had the lawyers come back and reargue their
case on the issue of damages.
Although the trial court requested that the Hartigans’ counsel prepare a final order,
upon Mr. Brush’s counsel’s request, the court allowed Mr. Brush’s counsel to submit his
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proposed findings of fact and conclusions of law as an exhibit to the remand hearing. It
is undisputed that when the Hartigans’ counsel prepared a proposed order, Mr. Brush’s
counsel expressed disagreement with the order. It is also undisputed that the Hartigans’
counsel subsequently submitted to the trial court both their proposed order and a copy of
findings of fact and conclusions of law that had been prepared by Mr. Brush’s counsel.3
Without further hearing, the trial court entered its final order on October 9, 2020,
adopting the proposed order submitted by the Hartigans without making any changes.
The trial court concluded the final order as follows in relevant part:
It is further
ORDERED, ADJUDGED AND DECREED that based upon the
facts presented to this Court the appropriate measure of damages in this
case is “the difference between the contract price and the fair market value
at the time of the breach.” It is further
ORDERED, ADJUDGED AND DECREED that the three appraisals
in the record, performed as a part of the Defendants Brush loan, were not
credible and could not be relied upon by this Court to determine the fair
market value of the property as of the date of the Defendants Brush breach.
It is further
ORDERED, ADJUDGED AND DECREED that, by a
preponderance of the evidence, the Plaintiffs, Hartigans, are entitled to and
are hereby awarded a Judgment against the Defendants Brush, jointly and
severally, in the amount of $225,688.98 which was computed by taking the
difference between the Purchase Price as set out in the Purchase
Agreement, in the amount of $712,000.00, and the price the Plaintiffs were
ultimately able to sell the Property to [third parties] in 2016 in the amount
of $550,000.00, also being the fair market value of the Property as of the
date of the Defendants Brush breach, less a credit to the Defendants Brush
3
On appeal, Mr. Brush attaches, as part of a “collective exhibit” to his brief, a letter purportedly sent by
the Hartigans’ counsel to the trial court clerk and master, copied to Mr. Brush’s counsel, with the
Hartigans’ proposed order attached, as well as a letter purportedly sent by Mr. Brush’s counsel to the
Hartigans’ counsel with an alternative set of proposed findings of fact and conclusions of law. However,
these letters and their attachments are not included in the appellate record. Inasmuch as this Court
reviews the record on appeal as it is filed by the trial court, we are unable to consider the content of the
documents attached to Mr. Brush’s brief. See Tenn. R. App. P. 13(c); Jennings v. Sewell-Allen Piggly
Wiggly, 173 S.W.3d 710, 712 (Tenn. 2005) (“This attachment [to an appellate brief] does not serve to
supplement the record on appeal.”).
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in the amount of $6,000.00 for the Earnest Money forfeited to the Sellers
per the terms of the Purchase Agreement, plus costs incurred by the
Plaintiffs for the upkeep of the property in the amount of $28,185.15; plus
the Plaintiff Hartigans’ share of attorney’s fees incurred in this cause in the
amount of $9,669.10; plus their share of the cost of the private investigator
in the amount of $600.00; and plus prejudgment interest in the total amount
of $31,234.73. It is further
ORDERED, ADJUDGED AND DECREED that the Plaintiffs shall
each be entitled to post-judgment interest in accordance with Tennessee
law.
Mr. Brush timely appealed.
II. Issues Presented
Mr. Brush presents five issues on appeal, which we have restated slightly as
follows:
1. Whether the trial court erred by adopting verbatim a final order
proposed by the Hartigans that contained findings of fact and
conclusions of law devoid of citations to the record.
2. Whether the trial court erred by not affording credibility to the
appraisals of the Property when calculating the fair market value of
the Property on the date of the contract breach.
3. Whether the trial court erred in its calculation of damages awarded
to the Hartigans for breach of contract.
4. Whether the trial court erred by awarding prejudgment interest to the
Hartigans.
5. Whether the trial court erred by awarding post-judgment interest to
the Hartigans.
III. Standard of Review
We review a non-jury case de novo upon the record with a presumption of
correctness as to the findings of fact unless the preponderance of the evidence is
otherwise. See Tenn. R. App. P. 13(d); Bowden v. Ward, 27 S.W.3d 913, 916 (Tenn.
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2000). “In order for the evidence to preponderate against the trial court’s findings of fact,
the evidence must support another finding of fact with greater convincing effect.” Wood
v. Starko, 197 S.W.3d 255, 257 (Tenn. Ct. App. 2006). Although “[d]eterminations
concerning the amount of damages are factually driven,” “the choice of the proper
measure of damages is a question of law.” BancorpSouth Bank, Inc. v. Hatchel, 223
S.W.3d 223, 228 (Tenn. Ct. App. 2006) (quoting Beaty v. McGraw, 15. S.W.3d 819, 827
(Tenn. Ct. App. 1998)). We review questions of law de novo with no presumption of
correctness. See Bowden, 27 S.W.3d at 916 (citing Myint v. Allstate Ins. Co., 970 S.W.2d
920, 924 (Tenn. 1998)); see also Hatchel, 223 S.W.3d at 228. The trial court’s
determinations regarding witness credibility are entitled to great weight on appeal and
shall not be disturbed absent clear and convincing evidence to the contrary. See
Morrison v. Allen, 338 S.W.3d 417, 426 (Tenn. 2011); Jones v. Garrett, 92 S.W.3d 835,
838 (Tenn. 2002).
This Court reviews a trial court’s decision to award prejudgment interest
according to an abuse of discretion standard. Myint v. Allstate Ins. Co., 970 S.W.2d 920,
927 (Tenn. 1998). As our Supreme Court has explained:
An award of prejudgment interest is within the sound discretion of
the trial court and the decision will not be disturbed by an appellate court
unless the record reveals a manifest and palpable abuse of discretion.
Spencer v. A-1 Crane Service, Inc., 880 S.W.2d 938, 944 (Tenn. 1994);
Otis v. Cambridge Mut. Fire Ins. Co., 850 S.W.2d 439, 446 (Tenn. 1992).
This standard of review clearly vests the trial court with considerable
deference in the prejudgment interest decision. Generally stated, the abuse
of discretion standard does not authorize an appellate court to merely
substitute its judgment for that of the trial court. Thus, in cases where the
evidence supports the trial court’s decision, no abuse of discretion is found.
Id.
IV. Independent Judgment of the Trial Court
Mr. Brush contends that the trial court erred on remand by adopting verbatim a
final order prepared by the Hartigans’ counsel. He particularly argues that (1) the order
included findings of fact and conclusions of law not specifically made by the trial court
during the remand hearing, (2) the findings of fact and conclusions of law did not include
specific citations to the trial record, and (3) the record casts doubt concerning whether the
final order represents the trial court’s own deliberations and decisions. The Hartigans
assert that the trial court’s final order represents the court’s “independent findings”
announced orally at the close of the remand hearing with some incorporation of findings
- 13 -
of fact and conclusions of law made in the court’s order entered prior to the first appeal.
Upon careful review, we determine that nothing in the record before us creates doubt as
to whether the trial court’s findings of fact and conclusions of law in the final order
represent the court’s own deliberations and decision.
Our Supreme Court has set forth the standard for a trial court’s practice of
receiving and utilizing party-prepared findings of fact and conclusions of law as follows
in pertinent part:
In the almost thirty years since Anderson [v. City of Bessemer City,
N.C., 470 U.S. 564 (1985),] was decided, most courts have approved, but
not recommended, the practice of trial courts receiving and using party-
prepared findings of fact, conclusions of law, and orders as long as two
conditions are satisfied. First, the findings and conclusions must accurately
reflect the decision of the trial court. Second, the record must not create
doubt that the decision represents the trial court’s own deliberations and
decision.
Smith v. UHS of Lakeside, Inc., 439 S.W.3d 303, 315-16 (Tenn. 2014) (emphasis added).
In vacating the trial court’s order granting summary judgment in Smith, the High Court
stated:
In this case, the judicial act should have consisted not only of
announcing a decision to grant part of [the appellant’s] motions for
summary judgment but also stating the grounds for that decision. Because
the record demonstrates that the trial court did not provide the basis for its
decision prior to the preparation of the draft orders, the grounds stated in
the order cannot be attributed to the trial court.
Smith, 439 S.W.3d at 317. This Court has recently noted that “[a]lthough Smith involved
summary judgment, this Court has previously applied the reasoning in Smith to
proceedings not involving summary judgment.” Cunningham v. Eastman Credit Union,
No. E2019-00987-COA-R3-CV, 2020 WL 2764412, at *4 (Tenn. Ct. App. May 27,
2020) (citing as examples Deberry v. Cumberland Elec. Membership Corp., No. M2017-
02399-COA-R3-CV, 2018 WL 4961527, at *2 (Tenn. Ct. App. Oct. 15, 2018); In re
Dakota M., No. E2017-01855-COA-R3-PT, 2018 WL 3022682, at *6 (Tenn. Ct. App.
June 18, 2018); In re Colton B., No. M2017-00997-COA-R3-PT, 2017 WL 6550620, at
*5 (Tenn. Ct. App. Dec. 22, 2007)).
In this case on remand, given that the parties announced an agreement as to the
recalculation of prejudgment interest awarded to Coldwell Banker, the trial court was
- 14 -
tasked with entering further findings of fact regarding the fair market value of the
Property, along with attendant reconsideration of damages, including the pre- and post-
judgment interest to be awarded, if any, to the Hartigans. At the beginning of the
hearing, Mr. Brush’s counsel submitted proposed findings of fact and conclusions of law
with citations to the trial record. During an opening statement, the Hartigans’ counsel
responded to specific findings and conclusions submitted by Mr. Brush, citing to and
reading passages from the trial transcript. Mr. Brush’s counsel countered, also citing to
the transcript but not reading from it. Apparently responding to a prior discussion
regarding review of the trial transcript, the trial court declined to read the entire transcript
in chambers but did afford an opportunity for both the Hartigans’ counsel and Mr.
Brush’s counsel to read any additional portions orally from the trial transcript. At that
time, first the Hartigans’ counsel and then Mr. Brush’s counsel read additional transcript
passages to the trial court relative to their respective arguments.
Upon the close of the remand hearing, the trial court announced its ruling,
confirming and explaining further its prior adjudication that the Hartigans were entitled to
the difference between the $712,000.00 purchase price in the original contract and the
$550,000.00 purchase price for which the property ultimately sold. In so ruling, the court
clarified its finding that the subsequent sale price represented the fair market value of the
real property at the time of the breach in that the subsequent sale had been conducted
under substantially similar conditions as those leading to the parties’ original purchase
and sale agreement.
Following the trial court’s oral ruling, Mr. Brush’s counsel asked if his findings of
fact and conclusions of law should be filed, and the court stated that it would permit those
as an exhibit filed relative to the remand hearing. The court then accepted the Hartigans’
counsel’s statement that she would prepare a draft of the final order. The parties were
subsequently unable to agree on a proposed order, and the Hartigans’ counsel submitted
to the trial court both the proposed order she had drafted and a copy of findings of fact
and conclusions of law prepared by Mr. Brush’s counsel. The court adopted the proposed
order submitted by the Hartigans’ counsel without making any changes to it. We will
address each of Mr. Brush’s arguments concerning the trial court’s adoption of the
proposed order in turn.
First, Mr. Brush is correct in noting that some findings of fact and conclusions of
law appearing in the final order were not specifically made by the trial court during its
oral ruling at the close of the remand hearing. A comparison of the trial court’s oral
ruling to the final order reveals that the findings of fact announced during the oral ruling
as to the rationale for calculating the fair market value of the Property and thus for
calculating damages are included in the final order. The final order also sets forth the
- 15 -
agreement, announced during the remand hearing, concerning calculation of the award of
prejudgment interest to Coldwell Banker.
However, additional findings of fact concerning the breach of the purchase and
sale agreement are included in the final order that were not part of the trial court’s oral
ruling on remand, and the order restates the award of damages to Lakeway Realty that
were not at issue in Hartigan I and are not at issue here. Comparing these findings to the
initial January 2019 “Final Order” appealed in Hartigan I, it is apparent that these
additional findings were in the original order entered by the trial court prior to the first
appeal. We determine that nothing in the final order now appealed from adds to or
contradicts the findings of fact and conclusions of law as set forth in the court’s
combined rulings in its January 2019 written order and June 2020 oral ruling on remand.
Second, Mr. Brush takes issue with a lack of citations to the record in the trial
court’s final order. However, Mr. Brush offers no authority, and our research has
revealed none, requiring that a trial court include citations to the trial record in its final
order. Instead, Mr. Brush quotes a passage from the transcript of the remand hearing
indicating that the court expressed an unwillingness to read the entire transcript of the
three-day trial, over which the court had presided, and instead requested that the parties
read any sections they respectively wished to highlight during the hearing. The trial court
stated in pertinent part:
I think during our discussion about setting this case for today there
was some mention perhaps of me going back and reading the transcript.
And my response to that was that I am absolutely not going to sit around
and read the transcript from the previous trial. If there’s some testimony
from the prior trial that you want me to consider, then you’re going to have
to read it to me verbatim. I’m not going to read it. I’m willing to listen to
it, but I’m not going to read it.
And what you were reading there a minute ago, if you’ve got some
testimony you want me to read and consider . . . . We tried this . . . three
days. And I’m not going to sit here and read the transcript from a three-day
trial. If there’s sufficient evidence in the record for me to make a finding,
then I’m willing to do it, but you’re going to – and if you want to point me
to a particular part of the transcript testimony, I’m willing to listen to it and
consider it, but I’m not going to – I’m not going to take the stuff and go
back to my office and sit around and spend days thumbing through that.
We’re going to do it today here now.
- 16 -
The transcript of the remand hearing further indicates that although the Hartigans’
counsel began the process of reading sections of the trial testimony to the court, Mr.
Brush’s counsel also cited the transcript and read from it in some detail during the
hearing.
At the conclusion of the trial court’s oral ruling, the following exchange occurred:
Trial Court: Do you want any additional findings of fact or
conclusions of law at this point? Is there
anything that I haven’t said, or findings?
The Hartigans’ Counsel: I think that covered it.
Trial Court: Mr. Becker [Mr. Brush’s Counsel]?
Mr. Brush’s Counsel: I’m all right. Your Honor, should I file this
proposed findings with the court for the court
file?
Trial Court: What is it?
Mr. Brush’s Counsel: It’s the same thing I gave to you.
Trial Court: Yes. I’ll allow you to enter that as an exhibit.
That will be Exhibit No. 2.
Mr. Brush’s Counsel: Thank you, Your Honor.
Trial Court: And then if it goes up again the appellate courts
can take a look at it, but [the Hartigans’
counsel] went to a lot of trouble to read the
testimony. I remember the testimony. As she
read it, I was hearing it again. I heard it once.
And I found that that testimony represented my
recollection of what I thought at the time to be
the facts, and I see no sense in going back any
further.
I think that this is a tough case because
it was a great big house, a beautiful house,
spectacular house, that cost somebody – cost
- 17 -
the sellers well in excess of $900,000 is my
recollection. And, again, I just – I haven’t
gone back and looked at the exhibits, but I may
be wrong about this, but I think that house had
a view that was a million dollar view, I mean.
The house was worth a million dollars, but that
view, if I’m not mistaken, was a million dollar
view. Just that alone was – you can’t find
places like that except rarely, but they found
one. And so . . . Okay. Ms. Clark [the
Hartigans’ Counsel].
The Hartigans’ Counsel: I’ll prepare the order.
Trial Court: Okay.
Mr. Brush intimates that the trial court’s refusal to read the entire transcript of a
trial over which it had presided means that the court based its findings of fact and
conclusions of law solely on the limited portions of the trial testimony read aloud during
the remand hearing. We disagree. Likewise, we do not find any abuse of discretion in
the trial court’s omission of citations to the trial record in its final order. The court’s
statements at the close of the remand hearing demonstrate that the court was thoroughly
familiar with the case, remembered the trial well, and was comfortable that its
recollection had been sufficiently rekindled by the hearing to rule and to provide the
explanation of its findings that this Court had found lacking in the January 2019 order.
Finally, Mr. Brush asserts that the record contains “ample evidence” “cast[ing]
doubt as to whether the decision actually represents the Trial Court’s own deliberations
and decision.” In support of this assertion, Mr. Brush cites the remand transcript,
particularly the court’s declination to read the entire trial transcript, and then begins his
argument as to the remaining issues on appeal. We will address these remaining issues in
the subsequent sections of this Opinion. Here, we determine that Mr. Brush is essentially
arguing that because the trial court did not find and conclude as he argues the trial court
should have, the record casts doubt as to whether the final order represents the court’s
independent judgment. This argument is without merit.
In addition to Smith, Mr. Brush cites Cunningham, in which this Court determined
that the final order, which had been entered following a bench trial in a probate action,
should be vacated, stating in relevant part:
- 18 -
[T]he transcript of evidence approved by the trial court reflects that the
court made no oral rulings at the conclusion of the February 12, 2019 trial
but instead took the matter under advisement, directing each party to submit
proposed findings of fact and conclusions of law. The record is devoid of
any direction provided to the parties by the trial court as to drafting their
proposed findings of fact and conclusions of law. In its May 7, 2019 order,
the trial court subsequently adopted nearly verbatim Executor’s proposed
findings of fact and conclusions of law.
***
Based upon the record before us, we cannot determine that Executor’s
proposed findings of fact and conclusions of law, adopted nearly verbatim
by the trial court, represent the trial court’s own independent analysis and
judgment.
Cunningham, 2020 WL 2764412, at *4-5.
In contrast to the trial courts in both Smith and Cunningham, the trial court in the
instant action announced its oral ruling in detail, confirming its prior determinations and
providing specific findings of fact regarding the fair market value of the Property and the
amount of damages to be awarded. We note that in appealing the January 2019 order in
Hartigan I, Mr. Brush did not raise an issue concerning the trial court’s independent
judgment.4 Therefore, Mr. Brush may not now legitimately question the independence of
the trial court’s earlier findings of fact and conclusions of law from the January 2019
order that have been included in the final order on remand. We conclude that the
conditions set forth in Smith for the trial court to adopt party-prepared findings of fact
and conclusions of law have been met. The findings and conclusions “accurately reflect
the decision of the trial court,” as evinced by the court’s January 2019 order and oral
4
The Hartigans argue in part that if Mr. Brush had believed that the final order cast doubt as to the
independence of the trial court’s judgment, he should have filed a Tennessee Rule of Civil Procedure 52
motion for additional findings of fact prior to raising the issue on appeal. We note that this Court has
repeatedly rejected what is essentially a waiver argument as to this issue. See Long v. Long, No. E2020-
01350-COA-R3-CV, 2021 WL 4398056, at *9 (Tenn. Ct. App. Sept. 27, 2021) (declining to deem the
issue of the judgment’s independence waived because the appellant had not filed a Rule 52 or Tennessee
Rule of Civil Procedure 59 motion); Vaughn v. DMC-Memphis, LLC, No. W2019-00886-COA-R3-CV,
2021 WL 274761, at *6 (Tenn. Ct. App. Jan. 27, 2021) (“[W]e have often considered this issue in the
absence of the argument being raised in the trial court.” (citing as examples Regions Commercial Equip.
Fin., LLC v. Richards Aviation Inc., No. W2018-00033-COA-R3-CV, 2019 WL 1949633, at *8 (Tenn.
Ct. App. Apr. 30, 2019); Bertuccelli v. Haehner, No. E2017-02068-COA-R3-CV, 2018 WL 6199229, at
*3 (Tenn. Ct. App. Nov. 28, 2018); Koczera v. Steele, No. E2015-02508-COA-R3-CV, 2017 WL
1534962, at *7 (Tenn. Ct. App. Apr. 28, 2017))).
- 19 -
ruling on remand, and the record does “not create doubt that the decision represents the
trial court’s own deliberations and decision.” See Smith, 439 S.W.3d at 316.
V. Fair Market Value and Calculation of Damages
Mr. Brush does not contest that he and his wife breached the purchase and sale
agreement. Instead, he contends that the trial court erred in its calculation of the resultant
damages to the Hartigans because if the trial court had credited the appraisal that was
completed closest to the date of the Brushes’ breach, valuing the property at $712,000.00,
the damages owed to the Hartigans would have been zero and the Brushes would have
been entitled to a credit for the $6,000.00 in earnest money. Mr. Brush’s substantive
issues on appeal all spring from his contention that the trial court erred in finding that the
fair market value of the Property at the time of the breach was equal to the amount for
which it subsequently sold, $550,000.00.
The Hartigans assert that the trial court properly determined that the most accurate
measure of the fair market value under the facts of this case was the subsequent sale
price. Upon thorough review of the record and applicable authorities, we determine that
the evidence does not preponderate against the trial court’s finding that the fair market
value of the Property at the time of the breach was $550,000.00, resulting in a general
damages award to the Hartigans in the amount of $162,000.00, representing the
difference between the contract price and the fair market value.
“The purpose of assessing damages in a breach of contract action is to make the
non-breaching party whole, to place the non-breaching party ‘in the same position he [or
she] would have been in had the contract been performed.’” Corbitt v. Amos, No.
M2011-01916-COA-R3-CV, 2012 WL 4473963, at *3 (Tenn. Ct. App. Sept. 27, 2012)
(quoting Hiller v. Hailey, 915 S.W.2d 800, 805 (Tenn. Ct. App. 1995)). Regarding the
measure of damages to be awarded in an action such as the one at bar, this Court
explained in Hartigan I:
The measure of damages to be awarded in an action for breach of
contract for the purchase of real property is the difference between the
contractual purchase price and the value of the property “at the time set for
closing.” Sec. Land Co. v. Touliatos, 716 S.W.2d 918, 921 (Tenn. 1986),
opinion modified on reh’g, 721 S.W.2d 250 (Tenn. 1986). “‘The fair
market value of the land is the price that a reasonable buyer would give if
he were willing to, but did not have to, purchase and that a willing seller
would take if he were willing to, but did not have to, sell.’” BancorpSouth
Bank, Inc. v. Hatchel, 223 S.W.3d 223, 229 (Tenn. Ct. App. 2006) (quoting
Nashville Hous. Auth. v. Cohen, 541 S.W.2d 947, 950 (Tenn. 1976)). We
- 20 -
have noted, however, that the term “fair market value” has not been well-
defined by the appellate courts. Eastman Credit Union v. Bennett, No.
E2015-01339-COA-R3-CV, 2016 WL 1276275, at *5 (Tenn. Ct. App. Mar.
31, 2016). We have cited with approval the definition of fair market value
as: “‘The price that a seller is willing to accept and a buyer is willing to
pay on the open market and in an arm’s-length transaction; the point at
which supply and demand intersect.’” Id. (citing Cutshaw v. Hensley, No.
E2014-01561-COA-R3-CV, 2015 WL 4557490 at *5 (Tenn. Ct. App. July
29, 2015)).
“‘The party seeking damages has the burden of proving them.’”
Hatchel, 223 S.W.3d at 229 (quoting Overstreet v. Shoney’s, Inc., 4 S.W.3d
694, 703 (Tenn. Ct. App. 1999)). Whether an appraisal or subsequent sale
price most accurately reflects the fair market value of a property at the time
of breach is driven by the factual circumstances of the case. See id. at 231-
32.
We have observed that, in some circumstances, “the amount a seller
is eventually able to obtain for the property may constitute evidence of its
fair market value at the time of the breach.” Id. at 231. However, “[i]n
order for the price received at a subsequent sale to represent the fair market
value of the real property, the subsequent sale must be conducted under
circumstances similar to those present at the initial sale and in an arms-
length fashion.” Id. at 232 (citation omitted). The circumstances
surrounding a subsequent sale, including the seller’s motivation “to achieve
the highest possible price for the property[,]” are factors to be considered
by the trial court when determining whether a subsequent sales price fairly
reflects the fair market value of the property at the time of breach. Id. at
232-33. We also have observed that, “[u]nder some circumstances, an
appraisal may provide a more accurate measure of the fair market value
than the actual selling price[.]” Simpson v. Golden Serv. Realty & Auction,
Inc., No. 02A01-9509-CH-00203, 1996 WL 732487, at *4 (Tenn. Ct. App.
Dec. 23, 1996). This is particularly true in circumstances under which a
seller is “under a compulsion to sell.” Id.
Hartigan I, 2020 WL 563522, at *3-4.
As a point of clarity, we note some confusion in the record regarding the date of
the Brushes’ breach of the purchase contract. As this Court found in Hartigan I, see id. at
*1, the Brushes withdrew from the purchase agreement on August 27, 2015, when they
informed the realtors that they were not going to complete the purchase. In its January
- 21 -
2019 order, the trial court awarded special damages for the Hartigans’ “incurred expenses
for the preservation and maintenance of the Property from September 7, 2015, the date on
which the Purchase Agreement with [the Brushes] terminated . . . .” In its final order on
remand, the trial court expressly found: “The date of the breach of contract by [the
Brushes] was September 7, 2015, the last date on which the Defendants Brush could have
performed per the terms and conditions as set out in the Purchase Agreement . . . .” In his
appellate brief, Mr. Brush states that the closing date for the Brushes’ purchase of the
Property “at the latest, would have been September 7, 2015, according to the Purchase
Agreement.” Although the Brushes gave notice that they were not going to complete the
purchase on August 27, 2015, the parties had agreed in the purchase agreement that the
closing would take place no later than September 7, 2015. We therefore determine that
the evidence does not preponderate against the trial court’s finding that the date of the
breach was September 7, 2015.
In Hartigan I, this Court remanded to the trial court because although the trial
court had found in its January 2019 order that the general damages award should be equal
to the difference between the contract price and the amount obtained at the subsequent
sale, the trial court’s order had “include[d] no findings with respect to the fair market
value of the property at the time of the breach . . . .” Id. at *4. Specifically, this Court
noted that the trial court’s order lacked findings as to “the circumstances surrounding the
2016 sale of the property,” “why or when the sales price was reduced,” and “the
appraised value of the property.” Id.
On remand, the trial court confirmed its determination that the proper measure of
general damages in this case should be $162,000.00, or the difference between the
$712,000.00 contract price and the subsequent $550,000.00 sales price. In doing so, the
trial court found in its final order that other than the removal of furniture and decorations
from the home, which the court found to be due to the Brushes’ breach, the circumstances
surrounding the 2016 sale were substantially similar to those surrounding the initial
contract. The trial court also expressly found that the three appraisals performed during
the summer of 2015 “were not credible and could not be relied upon by this Court to
determine the fair market value” of the Property at the time of the breach. As to how and
when the price was reduced to $550,000.00, the trial court found in its final order that this
was the amount of the “single offer” received for the Property following the breach.
However, the court did not make a specific finding concerning how and when the
Hartigans lowered the price. During the trial, Mr. Hartigan testified that they had
received the $550,000.00 offer from the ultimate buyers after they had reduced the asking
price to $590,000.00 “near the very end.”
In the instant appeal, Mr. Brush ostensibly raises two separate issues regarding the
trial court’s calculation of damages, first challenging separately whether the trial court
- 22 -
erred by declining to afford credibility to the three appraisals, particularly the
$712,000.00 appraisal completed most closely to the time of the breach, and then
presenting his overarching issue that the trial court erred in its calculation of damages.
Accordingly, we will first address the trial court’s consideration of the appraisals within
its overall findings as to fair market value and the calculation of damages.
However, at the outset, we note that within his argument regarding fair market
value, Mr. Brush also asserts that the trial court “improperly charged” him for
“improvements” made to the Property by the Hartigans after the Brushes had breached
the contract. In its final order, the trial court reiterated its previous award of special
damages to the Hartigans, including $28,185.15 for “costs incurred by [the Hartigans] for
the upkeep of the property,” $9,669.10 for the Hartigans’ share of the plaintiffs’
reasonable attorney’s fees, and $600.00 for the Hartigans’ share of a private
investigator’s fee.5 Mr. Brush did not raise an issue in the first appeal concerning the
amount of special damages awarded to the Hartigans. See Hartigan I, 2020 WL 563522,
at *3 n.2. As a result, the award of special damages was not at issue on remand and is not
properly at issue in this appeal. Moreover, Mr. Brush has not raised an issue regarding
special damages in his statement of the issues in this appeal. Insofar as Mr. Brush may
be attempting to raise an issue concerning the award of special damages within the
argument section of his appellate brief, we deem the issue to be waived. See Tenn. R.
App. P. 13(b) (“Review generally will extend only to those issues presented for
review.”); Forbess v. Forbess, 370 S.W.3d 347, 356 (Tenn. Ct. App. 2011) (“We may
consider an issue waived where it is argued in the brief but not designated as an issue.”).
A. Appraisals
As part of the financing approval process for the Brushes’ purchase contract, three
appraisals were completed on the Property. Following the initiation of the purchase
agreement in June 2015, the Brushes first sought financing with Quicken Loans, which
engaged an appraiser that valued the Property at $640,000.00. According to testimony
presented by all of the parties involved, realtors included, the realtors’ initial reaction to
this appraisal was that it was too low. At Carol Ann Buchanan’s urging as their realtor,
the Brushes sought financing through a local lender, Peoples Home Equity, which
secured the second appraisal in July 2015, resulting in a valuation of the Property at
$730,000.00. Laura Fritts, the producing branch manager for Peoples Home Equity,
testified that it was common practice with what she termed a “jumbo loan,” meaning at
that time a loan for an amount over $417,000.00, for the underwriter of the loan to
require a review of the appraisal. This review resulted in the third appraisal on August
12, 2015, valuing the Property at $712,000.00, the amount of the contract price.
5
Mr. Hartigan testified that the plaintiffs engaged a private investigator to locate the Brushes after the
Brushes had given notice that they would not be completing the purchase.
- 23 -
The two appraisals to which Mr. Brush specifically argues the trial court should
have afforded greater weight are the $730,000.00 and $712,000.00 appraisals, which
were presented as exhibits by the plaintiffs during Ms. Fritts’s testimony. In response to
Mr. Brush’s argument, the Hartigans posit that the trial court properly considered the
appraisals but found that the better measure of fair market value under the circumstances
was the subsequent sale price. The Hartigans state that they proffered the appraisals at
trial as evidence that the appraisal contingency of the purchase agreement had been
fulfilled rather than as evidence of the Property’s fair market value.6
In its final order, the trial court concluded that “the three appraisals in the record,
performed as a part of the Defendants Brush loan, were not credible and could not be
relied upon by this Court to determine the fair market value of the property as of the date
of the Defendants Brush breach.” In support of this conclusion, the trial court also
articulated in part:
The court considered the appraisals that were performed as a part of the
Defendants Brush loan in determining the fair market value of the Property
as of the date of the Defendant Brushes’ breach, but found them to be
unreliable based upon testimony presented at trial, including . . . but not
limited to, the testimony of [Mr. Brush].
Mr. Brush particularly takes issue with the trial court’s characterization of his testimony
concerning the appraisals, also noting a finding made by the court that Mr. Brush had
offered testimony “that he did not trust the appraised values as found by the various
appraisals for many reasons, one being that none of the appraisers used comparables
found anywhere in the immediate area of the property.” Mr. Brush urges that the overall
import of his testimony was that through the process of attempting to purchase the
Property, he developed mistrust of Ms. Buchanan, the realtor representing the Brushes as
buyers, rather than mistrust of the appraisals.
Upon review of the record, including the entire trial transcript, we agree that Mr.
Brush’s developing mistrust of his realtor is evident in his testimony. However, Mr.
Brush also did not express confidence in the appraisals. Mr. Brush testified that after the
first appraisal resulted in a valuation of $640,000.00, he began to question why the
6
The Hartigans also posit that Mr. Brush waived any argument in favor of the accuracy of the appraisals
by failing to argue such during trial, citing Watson v. Watson, 309 S.W.3d 483, 497 (Tenn. Ct. App. 2009)
(“Issues that are not raised in the trial court may . . . be deemed waived.”). However, we determine that
with the presentation of the appraisals as exhibits by the plaintiffs, the accuracy of the appraisals was
properly before the trial court as one consideration of fair market value. Therefore, we decline to deem
Mr. Brush’s argument waived in this regard.
- 24 -
Property would be valued that low and discovered, through online research, information
regarding the 2008 Tennessee Valley Authority coal ash spill in Kingston. Testimony
and email correspondence presented during trial also demonstrated, however, that when
the Brushes questioned Ms. Buchanan concerning the coal ash spill, she provided
information to them, and the Brushes decided to go forward with the purchase at that
time.7 Mr. Brush further testified that when informed of the need for a second appraisal,
he and his wife were concerned that it might again be insufficient for the lender. Mr.
Brush stated:
And [Ms. Buchanan] said, “Well, I can’t really do much with the appraiser.
I can’t pick the appraiser, but I know this guy and he helped me on a house
a couple of years ago that we were having trouble getting appraised, and we
got it done. And guess who has to let him into that property and that gate
when he comes out there to appraise that property?” Oh, okay. And,
magically enough, the appraisal came in $100,000 higher than the other
guy.
And then when I looked at it – in retrospect, when I looked at it, all
three of the comps that he had on there were from Knoxville, Tennessee,
the same place where the other guy used comps at $100,000 less. I don’t
know what’s wrong with this picture, but it started not smelling good to me.
***
My credibility in her [Ms. Buchanan] went out the window when I
found out about that coal ash spill and we weren’t informed.
Mr. Brush insists that because the Hartigans’ counsel read the above transcript
passage, among others, from Mr. Brush’s testimony to the trial court during the remand
hearing, the court accepted Mr. Brush’s statements out of context, which he argues is
evinced by the trial court’s finding that Mr. Brush found the appraisals to be unreliable.
Mr. Brush thereby emphasizes his earlier argument that the trial court accepted the
proposed final order prepared by the Hartigans’ counsel in error. We find this argument
to be unavailing. The gravamen of Mr. Brush’s testimony was certainly that he had
developed mistrust for his representation in the real estate proceedings at issue.
However, the central issue before the trial court on remand, as it is before this Court on
appeal, was the fair market value of the Property, and we do not discern error in the trial
court’s finding that neither Mr. Brush nor the real estate professionals expressed
confidence in the accuracy of the appraisals.
7
Undisputed testimony indicated that the Property was not positioned on the water, was located several
miles from the Tennessee Valley Authority plant, and was not included in any reclamation efforts.
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As the Hartigans note, the trial court stated in its final order that it “considered”
the appraisals but found them to be “unreliable.” In its ruling at the close of trial, the
court stated in relevant part:
The size and location of the house made it difficult even to find
comparables in value for the purpose of making an appraisal. It would have
. . . seemed extremely difficult to find comparable sales of comparable
homes anywhere nearby, and I think that was in the testimony as well.
Mr. Brush argues that the trial court contradicted itself because it found in its oral ruling
that the house was “incredible,” “spectacular,” and “like a million dollar house.” We
disagree. The court found that given its location and the lack of comparable homes in the
area, the home was simply too expensively built for the Hartigans to recover the over
$900,000.00 they had spent in constructing it. Mr. Brush’s argument conflates the trial
court’s findings regarding the cost to build the home and its impressive features with fair
market value. Instead, the court found quite the opposite, stating in its oral ruling that
“the house was going to sell for less than what it cost to build it from the day it was
built.” We determine that the trial court properly considered the appraisals in light of the
other evidence presented and that the totality of the evidence did not preponderate against
the trial court’s finding that the appraisals were unreliable under the specific facts of this
case as indicators of fair market value at the time of the breach.
B. Fair Market Value and Calculation of Damages
Having found the appraisals to be unreliable as to fair market value of the Property
at the time of the breach, the trial court determined the most accurate measure of fair
market value to be the sale price obtained by the Hartigans in September 2016,
approximately a year after the Brushes had breached the purchase agreement. To
establish that the subsequent sale price was the best measure of fair market value, the
Hartigans were required to prove that “the subsequent sale [was] conducted under
circumstances similar to those present at the initial sale and in an arms-length fashion.”
See Hatchel, 223 S.W.3d at 232 (internal citations omitted). In its final order, the trial
court found concerning the subsequent sale:
The sale of the Property to the third-party buyers . . . was an arms-
length transaction which closed on September 29, 2016.
Similar to the Purchase and Sale Agreement between [the Brushes]
and [the Hartigans], the contract between [the Hartigans] and the third-party
buyers . . . utilized the same form generated by the Tennessee Association
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of Realtors; had the same four contingencies: an appraisal contingency, a
home inspection contingency, a title contingency, and a financial
contingency; and was substantially similar to the contract entered into with
[the Brushes].
The purchase price achieved for the sale of the property to the third-
party buyers . . . in the amount of $550,000.00 was an arms-length
transaction between willing buyers and willing sellers neither under any
compulsion to buy or sell.
To the extent that the property was unfurnished at the time the
property was placed back on the market, this was caused by [the Brushes’]
breach. The furnishings were removed by [the Hartigans] in an effort to
comply with the terms and conditions of the Purchase Agreement with [the
Brushes] to yield possession of the property to [the Brushes] at closing.
[The Brushes] were aware the furnishings had been removed as of the date
of their breach and to the extent the furnishings being removed impacted
the second sale, this was caused by [the Brushes’] breach.
The purchase agreement with the third-party buyers . . . was
achieved using a substantially similar marketing method as the marketing
method that was used to achieve the contract with [the Brushes].
The purchase price paid by the third-party buyers . . . is the best
evidence of the fair market value of the property as of the date of [the
Brushes’] breach of contract with [the Hartigans].
(Paragraph numbering omitted.) Upon careful review, we agree with the trial court.
Mr. Brush contends that the subsequent sale was not substantially similar to the
purchase agreement at issue specifically because (1) the purchase price was different, (2)
a “fillable” blank in the third-party contract’s financial contingency stated that the
agreement was conditioned on the buyers’ “ability to obtain a loan(s) in the principal
amount up to tbd% of the Purchase Price,” as opposed to the 80% of the principal amount
that was required in the same contingency of the purchase agreement at issue; and (3) the
Hartigans had made “improvements” to the Property, including repairing a crack in the
driveway, patching drywall where artwork had been hung, repairing lawn sprinkler heads,
and repairing a motion light. We are not persuaded that these distinctions render the two
sales to be dissimilar.
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First, the purchase price is, of course, the issue at hand as to the fair market value
the Hartigans were able to recover and does not equate to a substantial difference in the
manner of the two sales. Second, although Mr. Brush testified that he was surprised that
twenty percent of the purchase price was required as a down payment, he did not attempt
to demonstrate that his breach was due to insufficient funds for the down payment and
actually testified to the opposite. Third, the trial court found that what Mr. Brush is
describing as “improvements” were actually repairs needed to maintain the Property,
crediting Mr. Hartigan’s testimony and documentation of the repairs to this effect.
When questioned regarding how the Property was marketed after the Brushes
withdrew from the purchase, Ms. Martin, the Hartigans’ realtor responded: “[W]e had to
put it back in the website, we had to – you know, we did numerous Home Guide ads. I
did another agent tour on the property. We did open house. We just continued to market
the property and put it into MLSs [multiple listing services].” Mr. Hartigan testified that
although they had moved the bulk of their furniture to Michigan in August 2015 in
preparation for the anticipated closing with the Brushes, he and his wife traveled back
and forth to ensure that at least one of them was on the Property twenty-five percent of
the time for insurance purposes. His testimony and his detailed expense sheets
established that the Hartigans maintained the Property in good order during the pendency
of the subsequent sale.
Mr. Hartigan and the real estate professionals involved each respectively opined
that a vacant home, or in this case, one that was not fully furnished and decorated, would
typically sell for less than an occupied, furnished home. The trial court found that this
distinction between the two sales, specifically the lack of furniture and decorations for the
second sale, may have had an impact on the reduced price. However, finding that the
Hartigans had moved their furnishings mere days before the anticipated closing in August
2015, the court further found that the absence of the furniture for the second sale was due
to the Brushes’ breach and was therefore not a distinction that should affect the measure
of damages as determined by the fair market value.
In support of his overall position that the trial court should have chosen the
$712,000.00 appraisal over the subsequent sale price as the appropriate measure of fair
market value, Mr. Brush relies on this Court’s decision in Tinkham v. Beasley, No.
M1999-02809-COA-R3-CV, 2000 WL 1727780 (Tenn. Ct. App. Nov. 22, 2000). In
Tinkham, which also involved breach of a contract for real estate, the trial court found
that the fair market value was the contract price but nonetheless awarded damages in the
amount of the difference between the contract price and an amount subsequently obtained
by the sellers at auction. See Tinkham, 2000 WL 1727780, at *1. Affirming the trial
court’s finding that the contract price was the most accurate measure of fair market value,
this Court, however, reversed the damages award, determining that because “[t]he
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undisputed measure of damages is the difference between the fair market value and the
contract price,” the damages were zero. Id. at *3.
In the case at bar, the trial court properly found that the measure of damages was
the difference between the fair market value and the contract price. As to the fair market
value, we find Tinkham to be highly factually distinguishable from this case because the
subsequent sale in Tinkham was a forced sale at auction. See Tinkham, 2000 WL
1727780, at *3 (“The fact that the house sold for $155,000 in a forced sale at auction
some four months later does not undermine the trial court’s decision not to value the
home at less than $167,000 because, as Mrs. Tinkham testified, one would expect that
property sold at auction would bring a lower price.” (citing Turner v. Benson, 672
S.W.2d 752, 755 (Tenn. 1984)).
Furthermore, we find Mr. Brush’s reliance on Corbitt, 2012 WL 4473963, to be
unavailing, not precisely because Corbitt involved comparison of two auction sales, but
because this Court found significant differences in the manner in which the two auction
sales were advertised and conducted. See Corbitt, 2012 WL 4473963, at *1. The Corbitt
Court determined that the substantial difference in the two sales was the primary reason
for the reduced price at the second sale and thereby determined the fair market value to
be the same as the contract price. Id. In contrast, the evidence presented in this matter
does not preponderate against the trial court’s finding that the manner by which the
instant purchase agreement was entered and by which the subsequent sale was achieved
were substantially similar.
Having determined that the trial court did not err in finding the fair market value
to be the amount obtained in the subsequent sale of the Property, we further determine
that the trial court properly found the measure of general damages to be the difference
between the contract price of $712,000.00 and the subsequent sale price of $550,000.00.
See Hatchel, 223 S.W.3d at 232. We therefore affirm the award of general damages to
the Hartigans in the amount of $162,000.00.
VI. Prejudgment Interest
Based on his contention that the general damages award to the Hartigans should
have been zero, Mr. Brush initially argues that the trial court erred by awarding any
prejudgment interest to the Hartigans. Inasmuch as we have determined in the previous
section of this Opinion that the trial court did not err in awarding to the Hartigans general
damages in the amount of $162,000.00, we find Mr. Brush’s argument in this regard to be
pretermitted as moot.
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However, Mr. Brush argues in the alternative that the trial court abused its
discretion in calculating the prejudgment interest, positing that prejudgment interest
awarded to the Hartigans “should be calculated to factor in the sale of the Property to the
third-party buyers” and should therefore not include the period of time between the
September 20168 closing on the third-party contract and the October-December 2018
trial. Mr. Brush also postulates that in awarding prejudgment interest, the trial court
failed to account for the Hartigans’ relief from the obligation to “pay the $10,800.00
differential in the commission owed” to Coldwell Banker after the third-party sale closed.
We discern no abuse of discretion in the trial court’s award to the Hartigans of
prejudgment interest.
In Hartigan I, this Court vacated the trial court’s initial $25,632.00 award of
prejudgment interest to Coldwell Banker, related to the exclusive buyer representation
agreement, agreeing with Mr. Brush’s position that “Coldwell Banker was not deprived
of the use of this amount for the entire period between the time of breach and the date of
judgment where Coldwell Banker recovered $19,800 when the property sold in October
2016.” 2020 WL 563522, at *5. Accordingly, this Court remanded for recalculation of
the prejudgment interest awarded to Coldwell Banker, quoting with approval this Court’s
previous decision in Scholz v. S.B. Int’l, Inc. 40 S.W.3d 78, 82 (Tenn. Ct. App. 2000), as
follows:
An award of prejudgment interest addresses damages incurred by a
party “because they have been deprived of the use of that money from the
time they should have received it until the date of judgment.” Scholz v. S.B.
Int’l, Inc., 40 S.W.3d 78, 82 (Tenn. Ct. App. 2000). Prejudgment interest
may not be appropriate under some circumstances, however, including
“when the party seeking prejudgment interest has already been otherwise
compensated for the lost time value of its money.” Id. at 83.
Hartigan I, 2020 WL 563522, at *5. As noted previously, the parties agreed on remand
to a recalculation of the prejudgment interest awarded to Coldwell Banker.
In contrast, the damages award to the Hartigans is predicated on the difference
between the contract price and the fair market value of the Property at the time of the
breach. The Hartigans have been without the use of the $162,000.00 difference for the
entire pendency of this matter. They did not recover any portion of that $162,000.00
difference through the September 2016 closing of the third-party sale. Mr. Brush also
8
Two dates, merely four days apart, appear in the record for the closing of the third-party purchase of the
Property: September 29, 2016, and October 3, 2016. Because the trial court in its final order found that
the sale closed on September 29, 2016, we have referenced that date here.
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argues that because the commission the Hartigans owed to their realtor, Coldwell Banker,
was less under the lower price of the second sale than it would have been under the
instant purchase agreement, the trial court should have credited Mr. Brush with the
benefit of that reduced amount through a reduced award of prejudgment interest to the
Hartigans. We do not find, however, that the principles espoused in Scholz dictate that
the Hartigans’ recovery for the Brushes’ breach of the purchase agreement should be
affected by the Hartigans’ third-party contractual responsibilities with Coldwell Banker.
See Scholz, 40 S.W.3d at 83 (“Fairness will, in almost all cases, require that a successful
plaintiff be fully compensated by the defendant for all losses caused by the defendant,
including the loss of use of money the plaintiff should have received.”) (emphasis added).
In its final order, the trial court awarded to the Hartigans a total judgment in the
amount of $225,688.98, which consisted of the general damages award of $162,000.00,
minus a credit to Mr. Brush for the $6,000.00 in forfeited earnest money, plus $28,185.15
for costs incurred to maintain the Property, $9,669.10 for the Hartigans’ share in the
plaintiffs’ reasonable attorney’s fees, $600.00 for the Hartigans’ share in the cost of a
private investigator, and $31,234.73 in prejudgment interest. The trial court did not
abuse its discretion in its calculation of prejudgment interest awarded to the Hartigans.
VII. Post-Judgment Interest
Again based on his contention that the general damages award to the Hartigans
should have been zero, Mr. Brush argues that the trial court’s award of post-judgment
interest to the Hartigans should be vacated. Tennessee Code Annotated § 47-14-122
(2013) provides: “Interest shall be computed on every judgment from the day on which
the jury or the court, sitting without a jury, returned the verdict without regard to a
motion for a new trial.” Having determined that the trial court did not err in its award of
damages to the Hartigans, we further determine that the trial court properly awarded
statutory post-judgment interest to the Hartigans as well. See Clement v. Clement, No.
W2006-00691-COA-R3-CV, 2007 WL 2318659, at *4 (Tenn. Ct. App. Aug. 15, 2007)
(“It is well-settled that the post-judgment interest statute is mandatory, and that trial
courts cannot ignore it.” (citing Vooys v. Turner, 49 S.W.3d 318, 322 (Tenn. Ct. App.
2001)).
VIII. Conclusion
For the foregoing reasons, we affirm the judgment of the trial court in its entirety.
We remand this case for enforcement of the judgment and collection of costs below.
Costs on appeal are taxed to the appellant, Arnold Brush, individually and in his capacity
as Administrator of the Estate of Pamela Sue Brush.
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s/ Thomas R. Frierson, II____________
THOMAS R. FRIERSON, II, JUDGE
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